Which of the Following Is NOT Classified as an Investing

question 26

Multiple Choice

Which of the following is NOT classified as an investing activity?

• A) Purchase of plant and equipment
• B) Sale of plant and equipment
• C) Issue of shares
• D) Purchase of shares in another company

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Definitions:

Preliminary Prospectus

An initial document provided by a securities issuer that offers details about an investment offering for potential investors.

Red Herring

A preliminary prospectus filed by a company with the SEC, usually in connection with an initial public offering (IPO), that is subject to amendment.

Rights Offerings

An offer made by a company to its shareholders to purchase additional shares directly from the company at a specified price and within a specific time period.

Pure Rights Offerings

A method of raising capital in which a company offers existing shareholders the right to purchase additional shares directly, usually at a discount.